Is Disability Insurance Through Work Enough If You Earn Over $200K?

Is disability insurance through work enough for a high earner? For someone earning over $200,000, an employer group long-term disability plan usually replaces far less income than its stated percentage suggests. Group plans commonly cap the monthly benefit at $10,000 to $15,000, generally count base salary only, and generally pay a taxable benefit when the employer pays the premium (IRS Publication 525). In the Seaworthy 2026 High Earner AI and Income Protection Survey (n=1,028, September 2026), 53 percent of respondents had disability coverage only through an employer, and among the 546 with employer coverage and bonus, commission, or equity pay, 40 percent believed the plan covered that pay or did not know. As an illustration, someone earning $400,000, with $300,000 in base salary and $100,000 in bonus, whose plan pays 60 percent of base with a $10,000 monthly cap receives $10,000 a month before tax. At a combined federal and state rate of 30 to 40 percent, that nets roughly $6,000 to $7,000 a month against about $33,000 a month of pay. Plans set their own percentages and caps. Group own-occupation language commonly lasts about 24 months before switching to an any-occupation test, and group plans commonly offset Social Security disability benefits. Group coverage typically ends when you leave the job, and replacing it later means new medical underwriting. About 28 percent of the policies in Seaworthy's placed book carry an exclusion or a rating, per the 2026 book audit. The individual policies Seaworthy places are owned by the insured, pay their base benefit regardless of Social Security, can be written with true own-occupation for the full benefit period, and cannot be canceled or have their benefits changed by the carrier while premiums are paid, typically to age 65 or 67. Benefits from an individual policy paid with after-tax premiums are generally tax-free. Tax treatment varies, so check with a tax professional. Presented by Jack Howard, Insurance Advisor at Seaworthy Insurance. https://seaworthy.io/team/jack-howard... This video is educational and not individualized advice. Policy and plan language varies by carrier, employer, state, and edition, and the issued policy or plan certificate governs any claim. Seaworthy Insurance is an independent disability insurance brokerage founded in 2011, licensed in all 50 states, and appointed with Guardian, Principal, MassMutual, Ameritas, and The Standard, placing coverage for physicians, dentists, CRNAs, attorneys, tech professionals, and other high-income specialists. Group vs individual disability insurance, the full guide. https://seaworthy.io/education/group-... Seaworthy 2026 High Earner AI and Income Protection Survey. https://seaworthy.io/research/high-ea... Own-occupation disability insurance. https://seaworthy.io/education/own-oc... Group vs individual coverage for tech professionals. https://seaworthy.io/specialties/tech... Group vs individual coverage for physicians. https://seaworthy.io/specialties/phys... Request a five-carrier quote comparison. https://seaworthy.io/quote/?utm_sourc... Chapters 0:00 Is disability insurance through work enough? 0:55 How much does group disability insurance pay a high earner? 1:43 What happens after 24 months on group disability? 2:30 Should you keep your group disability plan? 2:56 What to check in your group plan during open enrollment